EUR/USD Back Under $1.23, EU Flare-Up Looming? (FXE)

August 9, 2012 2:09 PM EDT
The Euro recovered after recent announcements for ECB president Mario Draghi, who has made bold statements in support of the Euro and the eurozone. Since then, the spot rate of EUR/USD recovered off their lows to trade at a high of 1.2442. However, today the Euro is back in jeopardy as EUR/USD trades back below 1.23.

Trader say the Euro needs to find support soon if it is going to continue higher, as a further breakdown will almost certainly put the lows back within striking distance.

Today’s move lower in the Euro could be tied to inflation in the EU which many think gives the ECB plenty of room for additional cuts. Last month the ECB took its main rate to a record low of 0.75 percent, and it might be only a matter of time before rates continue lower.

There are plenty of other wild cards that remain with regard to ECB and Fed action, and EUR/USD is likely to see plenty of action in the coming weeks.

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